Under Oman’s system, the tax department has five years (from the end of the tax year in which the tax return was submitted) to make enquiries. Given this extended enquiry window, companies usually have several open tax years, and the tax department often raises enquiries regarding multiple tax years at the same time and typically allows taxpayers only 30 days to respond.
There are recent reports of a significant number of enquiry letters, covering as many as four open tax years, up to the 2012 tax year. The letters generally give the taxpayer only 30 days to respond, and based on discussions with the tax department, the aim is to finalize assessments by the end of July 2014.
Assessments will be based on the information provided by the taxpayer. When information has not been provided or is insufficient, assessments will likely be based on adjustments that the tax department considers appropriate—and unlikely to favor the taxpayer / company.
These developments make it even more important for taxpayers to prepare and maintain a tax audit file for each open tax year, so that they are well positioned to respond to assessment queries within these tight deadlines.
The tax department has also increased the threshold for assigning taxpayer files to the Large Taxpayer Unit.
Special economic zone at Duqm
Regulations have been issued regarding incentives available to businesses operating in the new special economic zone at Duqm. The regulations also set out the requirements that businesses must satisfy to qualify for the incentives.
Read a May 2014 report prepared by KPMG: Oman - tax assessments and deadlines, new Duqm zone